ENGLISH
BERKSHIRE HATHAWAY INC.
To the Stockholders of Berkshire Hathaway Inc.:
Operating earnings in 1977 of $21,904,000, or $22.54 per
share, were moderately better than anticipated a year ago. Of
these earnings, $1.43 per share resulted from substantial
realized capital gains by Blue Chip Stamps which, to the extent
of our proportional interest in that company, are included in our
operating earnings figure. Capital gains or losses realized
directly by Berkshire Hathaway Inc. or its insurance subsidiaries
are not included in our calculation of operating earnings. While
too much attention should not be paid to the figure for any
single year, over the longer term the record regarding aggregate
capital gains or losses obviously is of significance.
Textile operations came in well below forecast, while the
results of the Illinois National Bank as well as the operating
earnings attributable to our equity interest in Blue Chip Stamps
were about as anticipated. However, insurance operations, led
again by the truly outstanding results of Phil Liesche’s
managerial group at National Indemnity Company, were even better
than our optimistic expectations.
Most companies define “record” earnings as a new high in
earnings per share. Since businesses customarily add from year
to year to their equity base, we find nothing particularly
noteworthy in a management performance combining, say, a 10%
increase in equity capital and a 5% increase in earnings per
share. After all, even a totally dormant savings account will
produce steadily rising interest earnings each year because of
compounding.
Except for special cases (for example, companies with
unusual debt-equity ratios or those with important assets carried
at unrealistic balance sheet values), we believe a more
appropriate measure of managerial economic performance to be
return on equity capital. In 1977 our operating earnings on
beginning equity capital amounted to 19%, slightly better than
last year and above both our own long-term average and that of
American industry in aggregate. But, while our operating
earnings per share were up 37% from the year before, our
beginning capital was up 24%, making the gain in earnings per
share considerably less impressive than it might appear at first
glance.
We expect difficulty in matching our 1977 rate of return
during the forthcoming year. Beginning equity capital is up 23%
from a year ago, and we expect the trend of insurance
underwriting profit margins to turn down well before the end of
the year. Nevertheless, we expect a reasonably good year and our
present estimate, subject to the usual caveats regarding the
frailties of forecasts, is that operating earnings will improve
somewhat on a per share basis during 1978.
Textile Operations
The textile business again had a very poor year in 1977. We
have mistakenly predicted better results in each of the last two
years. This may say something about our forecasting abilities,
the nature of the textile industry, or both. Despite strenuous
efforts, problems in marketing and manufacturing have persisted.
Many difficulties experienced in the marketing area are due
primarily to industry conditions, but some of the problems have
been of our own making.
A few shareholders have questioned the wisdom of remaining
in the textile business which, over the longer term, is unlikely
to produce returns on capital comparable to those available in
many other businesses. Our reasons are several: (1) Our mills in
both New Bedford and Manchester are among the largest employers
in each town, utilizing a labor force of high average age
possessing relatively non-transferable skills. Our workers and
unions have exhibited unusual understanding and effort in
cooperating with management to achieve a cost structure and
product mix which might allow us to maintain a viable operation.
(2) Management also has been energetic and straightforward in its
approach to our textile problems. In particular, Ken Chace’s
efforts after the change in corporate control took place in 1965
generated capital from the textile division needed to finance the
acquisition and expansion of our profitable insurance operation.
(3) With hard work and some imagination regarding manufacturing
and marketing configurations, it seems reasonable that at least
modest profits in the textile division can be achieved in the
future.
Insurance Underwriting
Our insurance operation continued to grow significantly in
1977. It was early in 1967 that we made our entry into this
industry through the purchase of National Indemnity Company and
National Fire and Marine Insurance Company (sister companies) for
approximately $8.6 million. In that year their premium volume
amounted to $22 million. In 1977 our aggregate insurance premium
volume was $151 million. No additional shares of Berkshire
Hathaway stock have been issued to achieve any of this growth.
Rather, this almost 600% increase has been achieved through
large gains in National Indemnity’s traditional liability areas
plus the starting of new companies (Cornhusker Casualty Company
in 1970, Lakeland Fire and Casualty Company in 1971, Texas United
Insurance Company in 1972, The Insurance Company of Iowa in 1973,
and Kansas Fire and Casualty Company in late 1977), the purchase
for cash of other insurance companies (Home and Automobile
Insurance Company in 1971, Kerkling Reinsurance Corporation, now
named Central Fire and Casualty Company, in 1976, and Cypress
Insurance Company at yearend 1977), and finally through the
marketing of additional products, most significantly reinsurance,
within the National Indemnity Company corporate structure.
In aggregate, the insurance business has worked out very
well. But it hasn’t been a one-way street. Some major mistakes
have been made during the decade, both in products and personnel.
We experienced significant problems from (1) a surety operation
initiated in 1969, (2) the 1973 expansion of Home and
Automobile’s urban auto marketing into the Miami, Florida area,
(3) a still unresolved aviation “fronting” arrangement, and (4)
our Worker’s Compensation operation in California, which we
believe retains an interesting potential upon completion of a
reorganization now in progress. It is comforting to be in a
business where some mistakes can be made and yet a quite
satisfactory overall performance can be achieved. In a sense,
this is the opposite case from our textile business where even
very good management probably can average only modest results.
One of the lessons your management has learned - and,
unfortunately, sometimes re-learned - is the importance of being
in businesses where tailwinds prevail rather than headwinds.
In 1977 the winds in insurance underwriting were squarely
behind us. Very large rate increases were effected throughout
the industry in 1976 to offset the disastrous underwriting
results of 1974 and 1975. But, because insurance policies
typically are written for one-year periods, with pricing mistakes
capable of correction only upon renewal, it was 1977 before the
full impact was felt upon earnings of those earlier rate
increases.
The pendulum now is beginning to swing the other way. We
estimate that costs involved in the insurance areas in which we
operate rise at close to 1% per month. This is due to continuous
monetary inflation affecting the cost of repairing humans and
property, as well as “social inflation”, a broadening definition
by society and juries of what is covered by insurance policies.
Unless rates rise at a comparable 1% per month, underwriting
profits must shrink. Recently the pace of rate increases has
slowed dramatically, and it is our expectation that underwriting
margins generally will be declining by the second half of the
year.
We must again give credit to Phil Liesche, greatly assisted
by Roland Miller in Underwriting and Bill Lyons in Claims, for an
extraordinary underwriting achievement in National Indemnity’s
traditional auto and general liability business during 1977.
Large volume gains have been accompanied by excellent
underwriting margins following contraction or withdrawal by many
competitors in the wake of the 1974-75 crisis period. These
conditions will reverse before long. In the meantime, National
Indemnity’s underwriting profitability has increased dramatically
and, in addition, large sums have been made available for
investment. As markets loosen and rates become inadequate, we
again will face the challenge of philosophically accepting
reduced volume. Unusual managerial discipline will be required,
as it runs counter to normal institutional behavior to let the
other fellow take away business - even at foolish prices.
Our reinsurance department, managed by George Young,
improved its underwriting performance during 1977. Although the
combined ratio (see definition on page 12) of 107.1 was
unsatisfactory, its trend was downward throughout the year. In
addition, reinsurance generates unusually high funds for
investment as a percentage of premium volume.
At Home and Auto, John Seward continued to make progress on
all fronts. John was a battlefield promotion several years ago
when Home and Auto’s underwriting was awash in red ink and the
company faced possible extinction. Under his management it
currently is sound, profitable, and growing.
John Ringwalt’s homestate operation now consists of five
companies, with Kansas Fire and Casualty Company becoming
operational late in 1977 under the direction of Floyd Taylor.
The homestate companies had net premium volume of $23 million, up
from $5.5 million just three years ago. All four companies that
operated throughout the year achieved combined ratios below 100,
with Cornhusker Casualty Company, at 93.8, the leader. In
addition to actively supervising the other four homestate
operations, John Ringwalt manages the operations of Cornhusker
which has recorded combined ratios below 100 in six of its seven
full years of existence and, from a standing start in 1970, has
grown to be one of the leading insurance companies operating in
Nebraska utilizing the conventional independent agency system.
Lakeland Fire and Casualty Company, managed by Jim Stodolka, was
the winner of the Chairman’s Cup in 1977 for achieving the lowest
loss ratio among the homestate companies. All in all, the
homestate operation continues to make excellent progress.
The newest addition to our insurance group is Cypress
Insurance Company of South Pasadena, California. This Worker’s
Compensation insurer was purchased for cash in the final days of
1977 and, therefore, its approximate $12.5 million of volume for
that year was not included in our results. Cypress and National
Indemnity’s present California Worker’s Compensation operation
will not be combined, but will operate independently utilizing
somewhat different marketing strategies. Milt Thornton,
President of Cypress since 1968, runs a first-class operation for
policyholders, agents, employees and owners alike. We look
forward to working with him.
Insurance companies offer standardized policies which can be
copied by anyone. Their only products are promises. It is not
difficult to be licensed, and rates are an open book. There are
no important advantages from trademarks, patents, location,
corporate longevity, raw material sources, etc., and very little
consumer differentiation to produce insulation from competition.
It is commonplace, in corporate annual reports, to stress the
difference that people make. Sometimes this is true and
sometimes it isn’t. But there is no question that the nature of
the insurance business magnifies the effect which individual
managers have on company performance. We are very fortunate to
have the group of managers that are associated with us.
Insurance Investments
During the past two years insurance investments at cost
(excluding the investment in our affiliate, Blue Chip Stamps)
have grown from $134.6 million to $252.8 million. Growth in
insurance reserves, produced by our large gain in premium volume,
plus retained earnings, have accounted for this increase in
marketable securities. In turn, net investment income of the
Insurance Group has improved from $8.4 million pre-tax in 1975 to
$12.3 million pre-tax in 1977.
In addition to this income from dividends and interest, we
realized capital gains of $6.9 million before tax, about one-
quarter from bonds and the balance from stocks. Our unrealized
gain in stocks at yearend 1977 was approximately $74 million but
this figure, like any other figure of a single date (we had an
unrealized loss of $17 million at the end of 1974), should not be
taken too seriously. Most of our large stock positions are going
to be held for many years and the scorecard on our investment
decisions will be provided by business results over that period,
and not by prices on any given day. Just as it would be foolish
to focus unduly on short-term prospects when acquiring an entire
company, we think it equally unsound to become mesmerized by
prospective near term earnings or recent trends in earnings when
purchasing small pieces of a company; i.e., marketable common
stocks.
A little digression illustrating this point may be
interesting. Berkshire Fine Spinning Associates and Hathaway
Manufacturing were merged in 1955 to form Berkshire Hathaway Inc.
In 1948, on a pro forma combined basis, they had earnings after
tax of almost $18 million and employed 10,000 people at a dozen
large mills throughout New England. In the business world of
that period they were an economic powerhouse. For example, in
that same year earnings of IBM were $28 million (now $2.7
billion), Safeway Stores, $10 million, Minnesota Mining, $13
million, and Time, Inc., $9 million. But, in the decade
following the 1955 merger aggregate sales of $595 million
produced an aggregate loss for Berkshire Hathaway of $10 million.
By 1964 the operation had been reduced to two mills and net worth
had shrunk to $22 million, from $53 million at the time of the
merger. So much for single year snapshots as adequate portrayals
of a business.
Equity holdings of our insurance companies with a market
value of over $5 million on December 31, 1977 were as follows:
No. of Shares Company Cost Market
------------- ------- -------- --------
(000’s omitted)
220,000 Capital Cities Communications, Inc. ..... $ 10,909 $ 13,228
1,986,953 Government Employees Insurance
Company Convertible Preferred ........ 19,417 33,033
1,294,308 Government Employees Insurance
Company Common Stock ................. 4,116 10,516
592,650 The Interpublic Group of Companies, Inc. 4,531 17,187
324,580 Kaiser Aluminum& Chemical Corporation ... 11,218 9,981
1,305,800 Kaiser Industries, Inc. ................. 778 6,039
226,900 Knight-Ridder Newspapers, Inc. .......... 7,534 8,736
170,800 Ogilvy & Mather International, Inc. ..... 2,762 6,960
934,300 The Washington Post Company Class B ..... 10,628 33,401
-------- --------
Total ................................... $ 71,893 $139,081
All Other Holdings ...................... 34,996 41,992
-------- --------
Total Equities .......................... $106,889 $181,073
======== ========
We select our marketable equity securities in much the same
way we would evaluate a business for acquisition in its entirety.
We want the business to be (1) one that we can understand, (2)
with favorable long-term prospects, (3) operated by honest and
competent people, and (4) available at a very attractive price.
We ordinarily make no attempt to buy equities for anticipated
favorable stock price behavior in the short term. In fact, if
their business experience continues to satisfy us, we welcome
lower market prices of stocks we own as an opportunity to acquire
even more of a good thing at a better price.
Our experience has been that pro-rata portions of truly
outstanding businesses sometimes sell in the securities markets
at very large discounts from the prices they would command in
negotiated transactions involving entire companies.
Consequently, bargains in business ownership, which simply are
not available directly through corporate acquisition, can be
obtained indirectly through stock ownership. When prices are
appropriate, we are willing to take very large positions in
selected companies, not with any intention of taking control and
not foreseeing sell-out or merger, but with the expectation that
excellent business results by corporations will translate over
the long term into correspondingly excellent market value and
dividend results for owners, minority as well as majority.
Such investments initially may have negligible impact on our
operating earnings. For example, we invested $10.9 million in
Capital Cities Communications during 1977. Earnings attributable
to the shares we purchased totaled about $1.3 million last year.
But only the cash dividend, which currently provides $40,000
annually, is reflected in our operating earnings figure.
Capital Cities possesses both extraordinary properties and
extraordinary management. And these management skills extend
equally to operations and employment of corporate capital. To
purchase, directly, properties such as Capital Cities owns would
cost in the area of twice our cost of purchase via the stock
market, and direct ownership would offer no important advantages
to us. While control would give us the opportunity - and the
responsibility - to manage operations and corporate resources, we
would not be able to provide management in either of those
respects equal to that now in place. In effect, we can obtain a
better management result through non-control than control. This
is an unorthodox view, but one we believe to be sound.
Banking
In 1977 the Illinois National Bank continued to achieve a
rate of earnings on assets about three times that of most large
banks. As usual, this record was achieved while the bank paid
maximum rates to savers and maintained an asset position
combining low risk and exceptional liquidity. Gene Abegg formed
the bank in 1931 with $250,000. In its first full year of
operation, earnings amounted to $8,782. Since that time, no new
capital has been contributed to the bank; on the contrary, since
our purchase in 1969, dividends of $20 million have been paid.
Earnings in 1977 amounted to $3.6 million, more than achieved by
many banks two or three times its size.
Late last year Gene, now 80 and still running a banking
operation without peer, asked that a successor be brought in.
Accordingly, Peter Jeffrey, formerly President and Chief
Executive Officer of American National Bank of Omaha, has joined
the Illinois National Bank effective March 1st as President and
Chief Executive Officer.
Gene continues in good health as Chairman. We expect a
continued successful operation at Rockford’s leading bank.
Blue Chip Stamps
We again increased our equity interest in Blue Chip Stamps,
and owned approximately 36 1/2% at the end of 1977. Blue Chip
had a fine year, earning approximately $12.9 million from
operations and, in addition, had realized securities gains of
$4.1 million.
Both Wesco Financial Corp., an 80% owned subsidiary of Blue
Chip Stamps, managed by Louis Vincenti, and See’s Candies, a 99%
owned subsidiary, managed by Chuck Huggins, made good progress in
1977. Since See’s was purchased by Blue Chip Stamps at the
beginning of 1972, pre-tax operating earnings have grown from
$4.2 million to $12.6 million with little additional capital
investment. See’s achieved this record while operating in an
industry experiencing practically no unit growth. Shareholders
of Berkshire Hathaway Inc. may obtain the annual report of Blue
Chip Stamps by requesting it from Mr. Robert H. Bird, Blue Chip
Stamps, 5801 South Eastern Avenue, Los Angeles, California 90040.
Warren E. Buffett, Chairman
March 14,1978
中文译文
伯克希尔·哈撒韦公司
致伯克希尔·哈撒韦公司的股东们：
1977年的营业利润为21,904,000美元，合每股22.54美元，表现略好于一年前的预期。这些利润中，每股1.43美元来自蓝筹印花公司实现的大额资本利得，根据我们在这家公司的持股比例，这部分收益计入了我们的营业利润。伯克希尔·哈撒韦公司或其保险子公司直接实现的资本利得或亏损，不纳入我们对营业利润的计算。虽然不应过分关注任何单一年度的数据，但从长期来看，总的资本利得或亏损记录显然具有意义。
纺织业务的表现远低于预期，而伊利诺伊国民银行以及我们按权益法核算的蓝筹印花公司股权收益，则基本符合预期。然而，保险业务再次由菲尔·利舍在国民 indemnity 公司的管理团队真正杰出的业绩引领，表现甚至超出了我们乐观的预期。
大多数公司将“创纪录的利润”定义为每股收益创下新高。由于企业每年通常会增加其权益资本，我们并不认为管理层实现——比如说——股本增加10%且每股收益增长5%的业绩有什么特别值得注意之处。毕竟，即使是一个完全沉睡的储蓄账户，也会因为复利效应而每年产生稳步增长的利息收益。
除特殊情况外（例如，债务权益比率异常的公司，或拥有以不切实际的资产负债表价值计量的重要资产的公司），我们认为衡量管理层经济表现更合适的指标是净资产收益率。1977年，我们基于期初权益资本的营业利润率为19%，略高于去年，并且高于我们自身的长期平均水平和美国工业的整体平均水平。但是，虽然我们的每股营业利润比去年增长了37%，但我们的期初资本也增长了24%，这使得每股收益的增长看起来远不如乍看之下那么令人印象深刻。
我们预计在未来一年难以复制1977年的回报率。期初权益资本比一年前增长了23%，并且我们预计保险承销利润率的趋势将在年底前明显转向下行。尽管如此，我们预计仍将有一个相当不错的年份，并且我们目前的估计——这当然要考虑到预测本身固有的局限性——是1978年的每股营业利润将有所改善。
**纺织业务**
1977年，纺织业务再次表现非常糟糕。过去两年，我们错误地预测了更好的结果。这或许能说明我们的预测能力、纺织行业的特性，或者两者兼而有之。尽管付出了艰苦的努力，但市场营销和生产方面的问题依然存在。营销领域遇到的许多困难主要是由行业状况造成的，但其中一些问题也是我们自身造成的。
一些股东质疑我们继续留在纺织行业的智慧，从长远来看，这个行业不太可能产生与其他许多业务相媲美的资本回报。我们的理由有几个：（1）我们在新贝德福德和曼彻斯特的工厂都是各自城镇的最大雇主之一，雇用的劳动力平均年龄较高，且拥有相对不易转移的技能。我们的员工和工会表现出非凡的理解和努力，与管理层合作，以实现能够维持可持续运营的成本结构和产品组合。（2）管理层在处理我们的纺织问题时也充满活力和直率。特别是，肯·蔡斯在1965年公司控股权变更后所做的努力，从纺织部门产生了所需资本，为我们盈利的保险业务的收购和扩张提供了资金。（3）通过努力工作和在制造和营销配置上发挥一些想象力，至少在纺织部门实现微薄利润在将来似乎是合理的。
**保险承销**
我们的保险业务在1977年继续大幅增长。1967年初，我们以约860万美元的价格收购了国民 indemnity 公司和国民火灾与海事保险公司（姊妹公司），从而进入了这个行业。那一年，它们的保费收入为2200万美元。1977年，我们的总保费收入为1.51亿美元。为实现所有这些增长，我们未曾增发过一股伯克希尔·哈撒韦的股票。
相反，这近600%的增长是通过以下方式实现的：国民 indemnity 公司在传统的责任险领域取得巨大增长；成立新公司（1970年的康胡斯克 casualty 公司，1971年的莱克兰火灾与 casualty 公司，1972年的德克萨斯联合保险公司，1973年的爱荷华州保险公司，以及1977年底的堪萨斯火灾与 casualty 公司）；用现金收购其他保险公司（1971年的家庭与汽车保险公司，1976年现已更名为中央火灾与 casualty 公司的克尔克林再保险公司，以及1977年底的赛普拉斯保险公司）；最后，通过在国民 indemnity 公司架构内营销额外的产品，其中最重要的是再保险。
总体而言，保险业务运作得非常好。但这并非一帆风顺。在这十年间，在产品和人方面都犯下了一些重大错误。我们遇到了重大问题，包括：（1）1969年启动的保证保险业务；（2）1973年将家庭与汽车保险公司城市汽车保险业务扩展到佛罗里达州迈阿密地区；（3）一项至今仍未解决的航空“前台”安排；（4）我们在加州的工人赔偿保险业务——我们相信，在目前正在进行的重组完成后，这项业务仍具有有趣的潜力。身处这样一个即使犯下一些错误也能取得相当令人满意的整体业绩的行业，是令人欣慰的。从某种意义上说，这与我们的纺织业务正好相反，在纺织业，即使是非常优秀的管理层，可能也平均只能取得微薄的成果。你们的管理层学到的教训之一——很不幸，有时是重新学到——是置身于顺风而非逆风行业的重要性。
1977年，保险承销的风向完全对我们有利。整个行业在1976年实施了非常大的费率上调，以抵消1974年和1975年灾难性的承保业绩。但是，由于保险单通常是按一年期签发的，定价错误只能在续保时修正，所以直到1977年，这些早期费率上调的全部影响才在利润中显现出来。
钟摆现在开始向另一边摆动。我们估计，在我们经营的保险领域，成本以接近每月1%的速度增长。这是由于持续的货币通胀影响了修理人和财产的成本，以及“社会通胀”——社会和陪审团对保险单承保范围的定义在不断拓宽。除非费率也以每月1%的速度增长，否则承保利润必然会缩水。最近，费率上调的步伐已显著放缓，我们预计，总体承保利润率将在今年下半年开始下降。
我们必须再次称赞菲尔·利舍，在他的承保部门同事罗兰·米勒和理赔部门同事比尔·莱昂斯的巨大协助下，国民 indemnity 公司在传统的汽车和一般责任险业务中于1977年取得了非凡的承保业绩。在1974-75年危机时期许多竞争对手收缩或退出之后，大量的业务增长伴随着极好的承保利润率。这些情况不久将会逆转。与此同时，国民 indemnity 公司的承保盈利能力已显著提高，并且，还有大量资金可用于投资。随着市场放宽和费率变得不足，我们再次面临在理念上接受业务量减少的挑战。这需要非凡的管理纪律，因为它与让竞争对手——哪怕是以愚蠢的价格——抢走业务的常规机构行为背道而驰。
由乔治·杨管理的再保险部门在1977年改善了承保业绩。尽管107.1的合并成本率（见第12页定义）并不令人满意，但其全年呈下降趋势。此外，与保费收入相比，再保险业务产生了异常高额的可投资资金。
在家庭与汽车保险公司，约翰·苏厄德继续在各方面取得进展。约翰是几年前在该公司承保业务一片亏损、面临可能倒闭的危机时，被火线提拔的。在他的管理下，公司目前健康、盈利且不断增长。
约翰·林沃特的“本州”业务现在由五家公司组成，堪萨斯火灾与 casualty 公司在1977年底在弗洛伊德·泰勒的领导下开始运营。本州公司的净保费收入为2300万美元，而三年前仅为550万美元。所有四家全年运营的公司的合并成本率都低于100，其中康胡斯克 casualty 公司以93.8的比率领先。除了积极监督其他四家本州公司的运营，约翰·林沃特还管理着康胡斯克公司的运营，该公司在其存在的七个完整年度中有六年的合并成本率低于100，并且从1970年白手起家，已发展成为内布拉斯加州领先的、采用传统独立代理系统的保险公司之一。由吉姆·斯托多尔卡管理的莱克兰火灾与 casualty 公司，在1977年因在本州公司中实现最低赔付率而赢得了主席杯。总而言之，本州业务继续取得卓越进展。
我们保险集团的最新成员是位于加利福尼亚州南帕萨迪纳的赛普拉斯保险公司。这家工人赔偿保险公司是在1977年底用现金购买的，因此，其当年大约1250万美元的业务量未纳入我们的业绩。赛普拉斯和国民 indemnity 公司目前在加州的工人赔偿业务不会合并，而是将独立运营，采用略有不同的营销策略。自1968年以来一直担任赛普拉斯公司总裁的米尔顿·桑顿，为保单持有人、代理人、员工和所有者 alike 运营着一流的业务。我们期待与他合作。
保险公司提供标准化的保单，任何人都可以复制。它们唯一的产品就是承诺。获得牌照并不困难，费率也是公开的。商标、专利、地理位置、公司历史、原材料来源等方面没有重要的优势，并且几乎没有消费者差异化来产生抵御竞争的壁垒。在公司年报中，强调人的差异是很常见的。有时这是真的，有时则不然。但毫无疑问，保险业务的性质放大了管理者个人对公司业绩的影响。我们非常幸运能拥有与我们合作的这群管理者。
**保险投资**
在过去两年中，保险投资按成本计（不包括我们在关联公司蓝筹印花的投资）从1.346亿美元增长到2.528亿美元。保费收入大幅增长带来的保险准备金增长，加上留存收益，是导致有价证券增加的原因。反过来，保险集团的净投资收益已从1975年税前840万美元提高到1977年的税前1230万美元。
除了来自股息和利息的这项收入外，我们还实现了税前690万美元的资本利得，其中约四分之一来自债券，其余来自股票。我们在1977年底的股票未实现收益约为7400万美元，但这个数字，像任何其他单一日期的数字一样（我们在1974年底有1700万美元的未实现亏损），不应太当真。我们大部分的股票大头寸将持有多年，我们投资决策的计分卡将由这些业务在那段时间内的经营业绩来提供，而不是由任何特定日期的价格来决定。正如在收购整个公司时过度关注短期前景是愚蠢的一样，我们认为在购买公司的一小部分（即有价普通股）时，被预期的近期收益或最近的收益趋势所迷惑同样是不可取的。
稍作离题说明这一点可能会很有趣。伯克希尔精细纺纱协会与哈撒韦制造公司于1955年合并，形成了伯克希尔·哈撒韦公司。1948年，按备考合并基础计算，它们税后利润近1800万美元，在新英格兰各地的十几家大型工厂雇佣了10,000名工人。在那个时期的商业世界中，它们是一个经济强国。例如，同年IBM的利润为2800万美元（现在为27亿美元），西夫韦商店为1000万美元，3M公司为1300万美元，时代公司为900万美元。但是，在1955年合并后的十年里，伯克希尔·哈撒韦的总销售额为5.95亿美元，却产生了总计1000万美元的亏损。到1964年，业务缩减到只剩两家工厂，净资产从合并时的5300万美元缩水至2200万美元。由此可见，用单一年度的快照来充分描绘一个企业是多么不足。
我们保险公司在1977年12月31日市值超过500万美元的股权投资如下：
股票数量 公司 成本 市场价值
------------- ------- -------- ----------
(单位：千美元)
220,000 资本城通信公司 .................... $ 10,909 $ 13,228
1,986,953 政府雇员保险公司
可转换优先股 ................... 19,417 33,033
1,294,308 政府雇员保险公司
普通股 ......................... 4,116 10,516
592,650 宏盟集团 .......................... 4,531 17,187
324,580 凯撒铝业与化学公司 ............... 11,218 9,981
1,305,800 凯撒实业有限公司 ................. 778 6,039
226,900 奈特-里德报业公司 ................ 7,534 8,736
170,800 奥美国际有限公司 ................. 2,762 6,960
934,300 华盛顿邮报公司 B类股 ............. 10,628 33,401
-------- --------
总计 ............................. $ 71,893 $139,081
所有其他持股 ...................... 34,996 41,992
-------- --------
权益证券总计 ...................... $106,889 $181,073
======== ========
我们选择有价权益证券的方式，与评估一家企业是否值得整体收购的方式大致相同。我们想要的企业是：（1）我们能理解的；（2）具有有利的长期前景；（3）由诚实且能干的人运营；（4）能以非常有吸引力的价格买到。我们通常不会试图通过预期短期有利的股价行为来购买股票。事实上，如果它们的业务经验继续令我们满意，我们欢迎我们所持股票的较低市场价格，将其视为以更好的价格收购更多好东西的机会。
我们的经验是，真正杰出企业的按比例份额，有时在有价证券市场上的售价，会远低于其在涉及整个公司的谈判交易中可能被要求的价格。因此，通过股票所有权，我们可以间接获得那些无法通过直接收购公司获得的便宜企业所有权。当价格合适时，我们愿意在选定的公司持有非常大的头寸，这并非出于取得控制权的意图，也不预见出售或合并，而是期望这些公司出色的经营业绩，长期来看将转化为所有者的（无论是少数股东还是多数股东）相应出色的市场价值和股息回报。
这类投资最初可能对我们的营业利润影响甚微。例如，我们在1977年向资本城通信投资了1090万美元。去年，我们购买的这些股份所产生的利润约为130万美元。但是，在我们营业利润数字中反映的，只有目前每年提供4万美元的现金股息。
资本城通信拥有非凡的资产和非凡的管理层。这些管理技能同样适用于运营和公司资本的使用。如果直接购买资本城通信所拥有的那些资产，成本大约会是我们通过股票市场购买成本的两倍，而且直接所有权不会给我们带来任何重要优势。虽然控制权会给我们提供管理运营和公司资源的机会和责任，但我们无法在这两个方面提供比现在在位的管理层更好的管理。实际上，通过不控股我们可以获得比控股更好的管理效果。这是一种非正统的观点，但我们相信它是可靠的。
**银行业**
1977年，伊利诺伊国民银行继续实现了大约是美国大多数大型银行三倍的资产收益率。像往常一样，这一纪录是在银行向储户支付最高利率并保持了低风险与极强流动性的资产状况的同时实现的。吉恩·阿贝格于1931年以25万美元创立了这家银行。在其第一个完整运营年度，利润为8,782美元。自那时起，该银行没有注入过新的资本；相反，自从我们在1969年收购以来，已经支付了2000万美元的股息。1977年的利润为360万美元，超过了许多规模是其两到三倍的银行的业绩。
去年年底，现已80岁、仍在经营着一家无与伦比的银行的吉恩，要求引入一位继任者。因此，前奥马哈美国国民银行总裁兼首席执行官彼得·杰弗里，于3月1日加入伊利诺伊国民银行，担任总裁兼首席执行官。
吉恩继续担任董事长，身体健康。我们预计罗克福德这家领先的银行将继续成功运营。
**蓝筹印花公司**
我们再次增加了在蓝筹印花公司的股权，到1977年底拥有约36.5%的股份。蓝筹印花公司度过了一个好年景，运营利润约为1290万美元，此外，还有410万美元的已实现证券收益。
蓝筹印花公司持股80%的子公司韦斯科金融公司（由路易斯·文森蒂管理）和持股99%的子公司喜诗糖果公司（由查克·哈金斯管理）在1977年都取得了良好进展。自1972年初蓝筹印花公司收购喜诗糖果以来，其税前营业利润从420万美元增长到1260万美元，而几乎没有增加额外资本投资。喜诗糖果是在一个单位销量几乎没有增长的行业中取得这一纪录的。伯克希尔·哈撒韦公司的股东可向罗伯特·H·伯德先生（地址：Blue Chip Stamps, 5801 South Eastern Avenue, Los Angeles, California 90040）索取蓝筹印花公司的年度报告。
沃伦·E·巴菲特，董事长
1978年3月14日